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(Jul 02, 2009) Taiwan acceded to the World Trade Organization's Government Procurement Agreement (GPA) on June 8, 2009, which will make it the 41st party to the treaty once formal accession enters in force 30 days thereafter, on or about July 9. The GPA, which is administered by a Committee on Government Procurement, "was negotiated in parallel with the Uruguay Round in 1994, and entered into force on 1 January 1996." The Committee "includes the WTO Members that are parties to the GPA, and thus have rights and obligations under the Agreement." (The Plurilateral Agreement on Government Procurement (GPA), WTO website, http://www.wto.org/english/tratop_E/gproc_e/gp_gpa_e.htm (last visited June 26, 2009).)

Joining the Agreement will enable Taiwan firms to compete for bids on government projects abroad; such global government procurement opportunities reportedly are worth about US$960 billion per year, and it is estimated that Taiwan firms could garner about one percent of that business. According to an Executive Yuan (Cabinet) official, Taiwan is globally competitive in the manufacture of computers, machinery, and hand tools. The Public Construction Commission also plans to work with affected industries to improve their competitiveness. For example, it will help large construction firms to enhance their engineering techniques and management.

In return for being able to have its firms compete for global procurement projects worldwide, Taiwan's own government procurement market will have to be open to foreign bidders. According to official sources, however, foreign firms already have gained access to the domestic bidding process; "over the past two years, an average of 26 percent of contracts have been awarded to foreign bidders," and so "Taiwan's accession would not greatly affect domestic firms in the short term." (President to Sign GPA Accord, TAIWAN TODAY, June 8, 2009, available at http://taiwantoday.tw/ct.asp?xItem=52222&ctNode=448&mp=9.)

Nevertheless, to afford some protection to local firms, the government will establish a threshold on its contracts open to foreign bidders, below which their bids will not be accepted. For central government procurement of goods and services, the threshold will be NT$6.52 million (about US$198,000); for purchases by Taiwan Province, Taipei City or Kaohsiung City, the threshold will be NT$10.03 million (about US$305,000); for state-run enterprises, it will be NT$20.07 million. In addition, some projects involving the electrical grid will be closed to foreign bidders and certain rail projects will be open to them only conditionally. The GPA does not include defense procurement within the scope of projects open for global procurement activities. (Id.)

Author: Wendy Zeldin More by this author
Topic: Economics and Public Finance More on this topic
Jurisdiction: Taiwan More about this jurisdiction
 World Trade Organization More about this jurisdiction

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Last updated: 07/02/2009